OREANDA-NEWS. The Semiconductor Industry Association recently noted that the global semiconductor market is expected to grow at a modest pace beyond 2015. The report maintained that the World Semiconductor Trade Statistics (WSTS) organization forecast 1.4% growth globally for 2016 (US$341.0 billion in total sales) and 3.1% growth for 2017 (US$351.6 billion). According to the report, WSTS tabulates its semi-annual industry forecast by convening an extensive group of global semiconductor companies that provide indicators of semiconductor trends.

Singapore’s Semiconductor and Semiconductor Equipment Sector includes stocks that are involved in the fabrication and manufacturing of semi-conductor chips in addition to testing and packaging of chips. The bulk of semiconductor demand is driven by consumer’s purchasing personal computers and mobile devices, such as cell phones and tablets. The 12 semiconductor stocks that make up the sector in Singapore have a combined market capitalisation of S$688 million, and maintain an average price-to-earnings (P/E) ratio of 6.9. The P/E ratio simply measures how much investors are paying for a stock based on its earnings over the past 12 months.

These 12 stocks averaged a 28.2% total return in the year thus far. The median total return of the 12 stocks was similar at 28.9% with nine gainers and three decliners. Within the sector, Manufacturing Integration Technology generated the strongest performance with a 156% price gain, in addition to distributing 1 cent in dividends. The next best performing stocks were Micro-Mechanics (Holdings), Avi-Tech Electronics, Smartflex Holdings and Sunright.

Last year, the 12 stocks averaged an 11.2% gain, again with nine gainers and three decliners. Details of the 12 semiconductors stocks are tabled below – please note that the table is sorted according to market capitalisation. To access the stock profile in SGX StockFacts please click on the stock name.

Source: SGX, Bloomberg & SGX StockFacts (data as of 14 December 2015)

Source: SGX, Bloomberg & SGX StockFacts (data as of 14 December 2015)

The 12 stocks tabled above averaged stronger year-to-date gains than the Philadelphia Stock Exchange Semiconductor Index (SOX) which gained 3.4% in SGD terms. Regionally, the stocks also outperformed in the year thus far, with the Bloomberg Asia Pacific Semiconductors Index generating a negative 7.5% return on an SGD basis.

The semiconductor stocks make up one of three key types of Information Technology stocks. According to the Global Industry Classification Standard(GICS®), these 12 Semiconductor plays fit the criteria of business focus in either the manufacturers of semiconductors, semiconductor equipment or the related products. Please note business lines can be similar to those stocks with a focus on Electronic Equipment, Instruments and Components – which are categorised to the Technology Hardware and Equipment  Sector.